Jul 25, 2008

Mktg - Interview CEO Lintas Media

Lynn de Souza, chairman and CEO of Lintas Media Group, is among the best minds in media planning in the country today.As director of media services at Lintas till recently, she was responsible for seven specialised media units. The 47-year-old tennis player, who's been seeded third at the all-India level and first at the Maharashtra level is known for not mincing words. She spoke to Shuchi Bansal on what the future holds for the Indian advertising industry How serious is the slowdown? Some advertisers are already complaining about input costs escalating, and while they haven't yet cut back on planned spends, they are extremely worried about media costs also spiralling upward. I see some tough times ahead in terms of media buying and negotiations. If advertisers don't get media at cost effective rates, they may decide not to advertise altogether, and use other means of staying in touch with the consumer. At the moment, the festive season budgets are still in play, and for categories in expansion mode such as telecom, there seems to be no looking back. Which categories do you see withdrawing first? Some of the financial categories — some IPO's have already delayed their campaigns. Airlines have stopped spending. Some of the bigger print media players privately admit that their advertising is tanking. There is no indication of volumes dropping for these large players, but many of them are looking at rate hikes. The Times of India has increased its rates by an average of 40 per cent which is a big hike to attempt, even for the Times! What is hurting the newspapers is the fact that the readership survey (IRS) continues to show a fall in readership, even for large titles, and that doesn't help them get better rates and prices for their ad space. Local dealer ads, classifieds and appointments, and now an increase in government spending, will keep the print medium well in business. I think marginal players in all media, print or TV will be the sufferers in the event of a downturn. How did the industry fare in the last such slowdown? In 2001 spends dropped across the board, and ad agency revenues also took a hit. But India is still in growth stage compared to the rest of the world. New categories are created, and despite inflationary trends and a volatile stock market, the vast consuming base, both domestic and exports, doesn't just vanish for such a large economy. Since 2001, the service sector — aviation, telecom, media — witnessed substantial growth. Infrastructure — technology and construction — have also kept pace. Do slowdowns benefit below-the-line industry and new media like mobile and Internet? Below-the-line initiatives can actually be more expensive if not handled properly. However, is used well, the digital media including mobile and internet do offer a great advantage to advertisers in times like this. Are the regional media markets growing faster? Regional media markets are definitely growing faster than national media. It's not just Maharashtra and the south, but the Hindi belt too is adding new readers, viewers and listeners. FM radio added over seven million new listeners in 2007, one million of these are in rural India— the one million came from Maharashtra alone. Of the total ad spends on print media last year, English got 48 per cent share while Hindi and other language press grabbed 52 per cent. On television, however, the share of spends on the English channels was 20 per cent compared to 80 per cent taken up by Hindi and other Indian languages. Sales of durables and services in particular are spreading into smaller markets, with better distribution, and greater availability and ease of consumer access. Car makers like Maruti run special panchayat level sales and advertising campaigns which work quite well. To push its small cars down the line, Maruti addressed the village sarpanch who wields power over his people. What is the share of various media in the industry? About 40 per cent of the Rs 18,000-crore industry revenue goes to TV and print each, 10 per cent to outdoor, 5 per cent to radio, and the balance split across cinema, digital media etc. Will growth decline? A growth of 18 per cent was predicted for 2008 over 2007, this could reduce to 15 per cent but not much below that. It's the 2009 figures we need to worry about, but we will hedge our bets post the festive season, monsoons, and hopefully a stock market revival. Can the advertising rupee pay for the rapid media expansion? They will have to depend on other sources of revenue — subscriptions, circulation, carriage charges, content re-purposing, etc. Does media consolidation just mean beating down ad rates? Hasn't the "planning" part in media taken a back seat? There are four or five large media buying groups across 10 or 12 agencies. Consolidation is not about pooling media volumes to ‘beat prices down' — it enables efficiencies of scale across several areas of operation which in a process-based business can be very helpful. Investments in data, research and technology can be made which otherwise become unaffordable. Speaking of my agency, I can honestly say that our planning capability, both strategic and tactical, has grown significantly in the past few years only because we have been able to invest in consumer knowledge and deploy resources better. Advertisers are getting savvier and look to agencies for marketing advice, not just for a cheaper media deal. Are you happy with the media measuring tools such as TAM, RAM or even the IRS and NRS. Everyone knows I am not. Though I sit on the board of every industry research body, we spend more time on discussion and debate and so little on actually getting good projects off the ground. As an industry, we are spending twice as much as what we need to, to get half the quality. Readership habits have changed but survey methodology hasn't. People buy more than one newspaper and parents and children consume different media. Magazines are consumed in a different way. But none of this is captured as only one person per household is interviewed. We are debating how to change that but it is tough. It requires funding and if everybody goes in different directions, then the funding gets split. TAM only covers Cable & Satellite homes and not Doordarshan homes. And advertisers who wish to go down and penetrate the market are unhappy. The trouble with TAM is that it does not report to a joint industry body. It has a profit model of its own. And BARC (Broadcast Audience Research Council) which represents the broadcasters, advertisers and agencies, wanted to take this up. Is BARC disintegrating after Pradeep Guha's exit? How strong are the industry bodies in India? BARC is made up of 12 representatives from three industries and Guha was the chairman and an IBF (Indian Broadcasting Foundation) representative. The IBF will nominate a new representative and BARC will elect a new chairman. The industry bodies do not lack relevance or teeth, what's missing is a common transparent agenda. Hopefully, with continued effort that will be overcome — one should stay optimistic, I suppose.

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